GDS Announces US$1 Billion Equity Raise By Its International Affiliate Led By Prestigious New US Investors.
GDS Holdings Limited (the “Company” or “GDSH”) (NASDAQ: GDS; HKEX: 9698), a leading developer and operator of high-performance data centers in China and South East Asia, today announced that its international affiliate, DigitalLand Holdings Limited (“GDS International” or “GDSI”), which acts as the holding company for GDSH’s data center assets and operations outside of mainland China, has entered into definitive agreements for certain institutional private equity investors (the “Investors”) to subscribe for US$1.0 billion of Series B convertible preferred shares (the “Series B”) newly issued by GDSI.
GDS International was established in 2022 with its corporate headquarters in Singapore. Its portfolio currently comprises approximately 480 MW of data center capacity in service and under construction and an additional 590 MW held for future development across strategic locations in Hong Kong, Singapore, Malaysia (Johor), Indonesia (Batam), and Japan (Tokyo).
The US$1 billion Series B investment is mostly comprised of new US investors, led by Coatue Management with substantial participation by The Baupost Group. Together with GDSI’s existing equity, the Series B raise will be sufficient to capitalize the development of up to 1 GW of total data center capacity.
GDSH has determined not to exercise its pre-emption rights for the Series B equity raise. Post closing and on an as-converted basis, GDSH will own approximately 37.6% of the equity interest of GDSI in the form of ordinary shares. The value of GDSH’s equity interest in GDSI implied by the Series B subscription price is approximately US$1.3 billion, equivalent to approximately US$6.75 per American Depositary Share of GDSH. Post closing, GDSH will no longer consolidate GDSI for accounting purposes and GDSH will no longer have the right to appoint a majority of directors to the Board of GDSI.
Mr. William Huang, Chairman and CEO of GDSH and Chairman of GDSI, said:
I am delighted to announce this new capital raising for our international business.
“Within a short period of time, we have created new markets in and around Singapore-Johor-Batam which are attracting both regional and global hyperscale demand. We see tremendous opportunities for growth in these markets as well as in other new markets which we are currently evaluating. The Series B equity issue benchmarks significant incremental value creation for our shareholders. We look forward to further achievements by our international business as we take it to the next level.”
Philippe Laffont, Founder of Coatue, said:
Data centers are mission critical infrastructure to support the future of AI and cloud.
“We have been very impressed by the management team, and its capabilities to execute and expand the footprint of the business in such a short period of time. We are excited to work alongside management to expand GDSI into a global leading data center platform.”
Robert Yin, Partner at Coatue, said:
GDSI has emerged as one of the most rapidly expanding data center platforms in the APAC region.
“We believe GDSI is strategically positioned to capitalize on demand for future AI and hyperscale solutions, and we look forward to supporting the business in its continued expansion of next-generation infrastructure.”
Richard Carona, Partner, The Baupost Group, said:
As a shareholder of GDSH, we are extremely impressed with William and his team and GDSI’s ambitious and credible international expansion plan.
“We’re pleased to support their growth as part of this Series B financing.”
The Closing is expected to occur as soon as the closing conditions provided in the definitive agreements are satisfied. It is expected that the Series B issuance will be exempted from registration under the Securities Act of 1933, as amended, (the “Securities Act”) pursuant to Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering or Regulation S under the Securities Act.
The Series B shares and the ordinary shares deliverable upon conversion of the Series B shares have not been registered under the Securities Act or any state securities laws. They may not be offered or sold within the United States or to U.S. persons absent registration or an applicable exemption from registration. This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any of these securities, nor shall there be a sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
GDSI’s financial and legal advisors for this transaction are Morgan Stanley Asia Limited and White & Case, respectively. Latham & Watkins served as the legal advisor for Coatue.
READ the latest news shaping the data centre market at Data Centre Central
GDS Announces US$1 Billion Equity Raise By Its International Affiliate Led By Prestigious New US Investors. source
